Oct. 12 (Bloomberg) -- Chinese stocks traded in New York
rose the most in two weeks on prospects policy makers will take
more steps to revive economic growth after a unit of its
sovereign wealth fund vowed to support banking shares.

The Bloomberg China-US Equity Index of the most-traded
Chinese companies in the U.S. surged 1.5 percent to 93.62
yesterday. Cnooc Ltd. gained the most since Sept. 27 as
PetroChina Co. rose to a three-month high. New Oriental
Education & Technology Group Inc. jumped to the highest level
since July on speculation the educational company will file its
fiscal year-end results next week. Yanzhou Coal Mining Co.
advanced to a two-month high after Citigroup Inc. highlighted a
buy recommendation among global peers.

Central Huijin Investment Ltd., a unit of China’s sovereign
wealth fund, started acquiring shares in the nation’s four
largest banks including Industrial & Commercial Bank of China
Ltd. China’s yuan rose beyond 6.28 per dollar for the first time
in 19 years yesterday on bets the government will add stimulus
to spur an economy that grew at the slowest pace in three years.

“The sovereign fund’s increasing holdings in banks can be
a minor step, but it does provide some degree of comfort to the
market,” Michael Gayed, the chief investment strategist at
Pension Partners LLC, which advises on over $150 million in
assets, said by phone from New York yesterday. “The more the
yuan is strengthening, the more likely the market anticipates
more stimulus is going to come to counter that strength as the
government wants a weaker yuan to help with its exports.”

China ETF Surges

The iShares FTSE China 25 Index Fund, the biggest Chinese
exchange-traded fund in the U.S., rallied for a third day,
gaining 2.4 percent to a five-month high of $36.09. The Standard
& Poor’s 500 Index was little changed at 1,432.84.

China’s Communist Party will hold a congress starting Nov.
8 for the once-a-decade power transition. The country’s economy
probably expanded 7.4 percent in the three months ended Sept.
30, according to the median estimate of 36 analysts surveyed by
Bloomberg before a government report due Oct. 18. That would be
the slowest pace since the first quarter of 2009.

Investors are still anticipating more policy response from
China to support growth and a stronger yuan is bolstering
investors’ optimism, according to Edmund Harriss, who helps
manage a $150 million equity fund at Guinness Atkinson Asset
Management in London.

“Optimism for that is growing,” he said. “The policy
they are looking to enact is likely to focus on infrastructure.
We won’t see many concrete announcements until after the party’s
congress.”

New Oriental

New Oriental, a Beijing-based private education service
provider being investigated by U.S. regulators, surged 6 percent
to $17.95, the highest since July 16 in New York.

Investors expect New Oriental to meet an Oct. 15 deadline
to make a 20-F fiscal year-end filing with the SEC, said Trace
Urdan, a San Francisco-based analyst at Wells Fargo & Co. who
rates the stock outperform. Short seller Muddy Waters LLC has
alleged that the Chinese education provider is misleading
investors. New Oriental said on Sept. 30 that a probe by three
independent company directors found no evidence to support fraud
allegations.

“Any information from the company is more of a positive
catalyst,” Urdan said in a phone interview yesterday. “By not
filing, New Oriental would risk being delisted, so investors
appear to be expecting relatively good news soon.”

Canada said it extended its review of Cnooc’s $15.1 billion
takeover of Calgary-based Nexen Inc. for 30 days to conduct a
“thorough and careful” assessment. “Extensions to the review
period are not unusual,” Industry Minister Christian Paradis
said in an e-mailed statement yesterday.

PetroChina, the country’s biggest oil producer, added 2
percent in the third day of gains to $133.75, the highest level
since June 20.

Crude oil for November delivery rose 0.9 percent to $92.07
a barrel on the New York Mercantile Exchange. Prices are up 7.3
percent from this time last year.

ADRs of Yanzhou Coal, China’s fourth-largest coal miner,
advanced 2.9 percent to a two-month high of $16 in New York. The
ADRs traded at a 1.7 percent premium over its Hong Kong stock,
the most in a week. Citigroup named Yanzhou as one of the “key
buys” among mining companies in the world in a report
yesterday.

Chalco ‘Key Sell’

Aluminum Corp. of China, the country’s largest maker of the
lightweight metal, was listed as one of the “key sells.”
Chalco’s ADRs dipped 0.3 percent to $10.34 in their fourth day
of declines.

Melco Crown Entertainment Ltd. rose for a third day after
JPMorgan Chase & Co. boosted its profit estimate for a
competitor. Melco, which operates casinos in Macau, added 1.1
percent to $13.39.

JPMorgan analyst Joseph Greff raised his forecast for the
third-quarter profit of Las Vegas Sands Corp. on better-than-estimated customer visits in a note yesterday. Analysts’
projections for Macau casino operators, including Melco, may
increase in the next few weeks, according to the report.